Correction Ahead? Citigroup Index Isn't Surprised; Gold Welcomes Your Support
The Citigroup Economic Surprise Index tracks the deviations of economic data from consensus views for all G10 economies (more on this index here) and has shown a very strong correlation to the S&P 500 for the past two years. It has been weakening over the past few months and forecasts a possible correction to the S&P 500’s 200-day moving average currently resting at 1270.
Aside from the strong possibility of a near-term correction, when looking at the broad strength of each sector in the S&P 500 (with the exception of Utilities), new 52-week highs versus lows, and percentage of stocks in upward trends, we do not yet anticipate a major market top, which is normally associated with broad-based deterioration. For a further discussion of our analysis, please read here.
Gold Welcomes Your Support
On another note, gold seems to be finding support at its 300-day simple moving average (300d SMA). As mentioned a few weeks ago, the 300d SMA has held as a major support line for the entirety of gold's 11-year bull run with the exception of 2008 when investors were panic selling (see long-term chart here). Ned Davis also noted that gold sentiment is trading at levels of extreme pessimism, which is typically associated with major bottoms.
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Cris Sheridan Archive
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